Comment of the Day
8th February 2023
Eoin Treacy
Feb 9
Video commentary for February 8th 2023
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: Japan inflation has not yet completed its base, China unwinding overbought, India steady, oil firm on backhanded support from President Biden, Turkey ETF as potential support, AI wobbles, gold still correcting.
Brookfield Has $90 Billion for Deals After Big Fundraising Year
This article from Bloomberg may be of interest to subscribers. Here is a section:
Brookfield Asset Management (TSX:BAM.A) Ltd.’s earnings rose in the fourth quarter as it wrapped up a record year of fundraising that has given the firm more than $90 billion to invest.
The Canadian alternative asset manager reported distributable earnings of $569 million, or 35 cents a share, up 6% from the prior year. It’s the first quarterly report for Brookfield Asset as a public company after it was spun out of parent Brookfield Corp. in December.
The company raised a record $93 billion in capital last year. “Our fundraising outlook remains strong,” Chief Executive Officer Bruce Flatt and President Connor Teskey said in a letter to shareholders. “In 2023, we expect to have three flagship funds in the market, along with several complementary perpetual strategies and other long-term funds.”
Brookfield Corp. spun off a 25% stake in the division in an effort to gain a higher valuation by separating the money-management business from its own investment capital. Brookfield Asset managed $418 billion in fee-bearing capital at the end of December across asset classes including real estate, infrastructure, credit, private equity and renewable power.
The Toronto-based company plans to more than double that to $1 trillion by 2027, driven by ambitious plans to grow in private credit and insurance. Some of the growth may come through acquisitions, Flatt suggested at a conference in December.
Eoin Treacy's view
$93 billion raised during a bear market for stocks and amid rising yields is an impressive feat. Blackstone is also chasing the moniker of the first alternative asset manager to reach $1 trillion under management.
This section continues in the Subscriber's Area.
Turkey Halts Stock Trading for Five Days and Cancels Some Trades
This article from Bloomberg may be of interest. Here is a section:
Borsa Istanbul has also canceled trades that were executed on the morning of Feb. 8 before transactions were suspended, citing low trading volumes. Before those cancellations, the benchmark Borsa Istanbul 100 Index had erased $35 billion in value and was headed for its worst weekly performance since the 2008 global financial crisis.
Even with Wednesday’s trades being removed, the two days of selling following the deadly earthquakes in Turkey’s southern region wiped out $21 billion in value. Turkish stocks, which are this year’s worst performers globally, entered a technical bear market on Tuesday after falling more than 20% from their January high.
Eoin Treacy's view
The earthquake in Turkey is a human disaster of epic proportions and will require significant investment in rebuilding. It is to be hoped building standards also improve to minimize the impact for inevitable future quakes. The big question in the short term is how much inflation will jump as the rebuilding process gets underway?
This section continues in the Subscriber's Area.
Alphabet Falls Most in 3 Months on Chatbot Accuracy Concerns
This article from Bloomberg may be of interest to subscribers. Here is a section:
The scrutiny comes as the battle to build the most accurate and effective search engine is escalating. On Monday, Google introduced Bard, whose underlying technology will eventually be built into Google.com. The next day, Microsoft Corp. said it was integrating a cousin of ChatGPT into Bing. On Wednesday, Google hosted a news conference in Paris where it shared more details about the company’s progress integrating artificial intelligence into search.
“The general sentiment is that ChatGPT and the Microsoft Bing announcement have created a narrative that Google’s search business model is under threat,” said Mark Riedl, a professor at the Georgia Institute of Technology.
Eoin Treacy's view
The market reaction to Bard’s inadequacies was both swift and severe. The downward dynamic experienced by Google shares demonstrates how fickle the mob can be during a momentum move driven by hope rather than earnings.
This section continues in the Subscriber's Area.
Eoin's personal portfolio: profit taken on precious metal trading position February 2nd 2023
One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary on a daily basis until there is a change.
© 2023 Eoin Treacy
548 Market Street PMB 72296, San Francisco, CA 94104
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